For most people, starting their contracting career with an umbrella company is viewed as the best way to go – and why not?
There may come a time, however, when you want to take a bit more control of your career and become your own boss. As a company director, you’ll enjoy a number of benefits that aren’t available to umbrella contractors.
Of course, nothing good in life is free. Limited company contractors have to carry out more administration and have additional responsibilities in return for their extra rewards – seems like a fair trade to us.
But what exactly could you enjoy as a company director? Here are four important reasons why you should consider making the leap to limited.
Be your own boss
While contracting with an umbrella company provides you with a lot more freedom than permanent employment, you’ll still be classed as an employee. By setting up your own business, you’ll be able to take charge of your career and do things how you want and when you want.
You can plan your assignments around your personal commitments, meaning you’ll never miss a special event. What’s more, you’ll be able to take pleasure watching your business grow, and reap the rewards of your hard work.
Increased tax efficiency
Running a limited company is generally considered to be the most tax-efficient way of working. That’s because you can pay yourself a combination of salary and dividends, reducing your tax liability – sounds good, doesn’t it?
As a company director, you can leave any surplus income in your business to withdraw at a later date. This is particularly useful if removing the funds straight away means you’ll pay a higher rate of tax.
What’s more, you’ll be able to borrow up to £10,000 interest-free from your business in the form of a director’s loan. This needs to be paid back within nine months of your company’s year end.
Claim more expenses
As a contractor, you might already be familiar with claiming for certain legitimate business costs and expenses while on assignment – did you know there are host of other things available to company directors?
As a limited company contractor, you can claim for the cost of marketing and advertising your business. These include website development, bulk mail and charity sponsorship.
You can also be reimbursed for telephone and broadband charges, as long as the accounts are in the company name. The same is true for mobile phone contracts.
For a full list of what you can claim for, please see our expenses guide.
Increased growth potential
One of the main benefits of running a limited company is that you’re already set up with the right structure to grow your venture further – if you want to. As your business expands, you might think about hiring more staff.
Becoming a small business has one major selling point – the prospect of earning even more money! If you take on extra employees, you’d be able to carry out more assignments and increase the revenue of your company.
Why choose ClearSky Contractor Accounting?
At ClearSky Contractor Accounting, we’ve helped thousands of people take control of their career and set up their own business. We’ll take away all the hassle of forming a limited company and give you complete peace of mind that all your obligations are taken care of.
We understand that contractors have a busy WorkStyle, so we make sure we’re with them all the way throughout their career, whenever they need us. Whether it’s help with IR35 or reminding you of important dates, our dedicated team of experts can assist with any queries you may have.
Our online portal lets you manage your accounts any time day or night at a time to suit you. What’s more, our extended opening hours mean you can contact a member of our time when it’s convenient for you – not the other way around. What’s more, you can receive tax relief on equipment such as computers, furniture and business vehicles through capital allowances.